Uganda’s Public Debt Hits Record $34.86 Billion, Raising Economic Concerns
Kampala, Uganda — Uganda’s national debt has surged to a historic high of $34.86 billion (Shs130.844 trillion) as of December 2025, according to the latest government report. The sharp rise, up from $34.21 billion (Shs128.648 trillion) just three months earlier, has sparked concerns over the country’s financial stability and its ability to fund critical public services.
The Ministry of Finance’s Quarterly Debt Statistical Bulletin reveals that domestic borrowing now makes up 54.5% of the total debt—amounting to $19.02 billion (Shs68.86 trillion)—while external debt accounts for 45.3%, or $15.84 billion (Shs57.33 trillion). The increase is largely attributed to new domestic debt issuances, signaling a shift in Uganda’s borrowing strategy.
Transparency and Economic Risks
Maris Wanyera, Acting Director for Debt and Cash Policy at the Ministry of Finance, defended the government’s approach, stressing the importance of clear financial reporting. “This bulletin is designed to provide accurate data on Uganda’s debt position, improve policymaking, and ensure sustainable economic growth through responsible debt management,” she said.
However, economists warn that unchecked borrowing could have severe consequences. As debt levels climb, servicing costs may divert funds away from essential sectors like healthcare, education, and infrastructure. Some analysts fear that without tighter fiscal controls, Uganda could face mounting repayment pressures, potentially slowing economic progress.
What’s Driving the Debt Surge?
While external borrowing has remained relatively stable, the spike in domestic debt suggests the government is increasingly relying on local financial markets to meet its funding needs. This strategy, while avoiding currency risks tied to foreign loans, could crowd out private sector credit, making it harder for businesses to access capital.
Experts also point to Uganda’s ambitious infrastructure projects—including roads, energy, and public works—as key contributors to the rising debt. While these investments aim to boost long-term growth, the immediate financial burden is raising questions about sustainability.
Public Reaction and Future Outlook
The latest figures have drawn mixed reactions. Proponents argue that strategic borrowing is necessary for development, while critics urge stricter oversight to prevent fiscal instability. Civil society groups have called for greater accountability in how borrowed funds are allocated, citing past concerns over mismanagement.
With debt levels now at a record high, all eyes are on Uganda’s next fiscal moves. Will the government curb spending, seek new revenue streams, or continue borrowing to fuel growth? The answer could shape the nation’s economic trajectory for years to come.
— Reported by Nexio News
